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Realtor Short Sale Success
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Realtors who want to do short sales can potentially do well in the current market, but there is a problem. Doing short sales really takes time away from what Realtors should be doing. Realtors should be helping regular sellers sell their properties and helping buyers buy properties. Realtors should partner with companies that specialize in the short sale process

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Here is the problem. A short sale includes two steps that are not found in a regular real estate sale. And most Realtors are not trained to perform these steps.

Let’s look at the structure of a short sale:

- Acquisition

- Negotiation

- Sale to buyer

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The acquisition and negotiation steps are the culprits. These steps require the Realtor to interact with the short-sale lender. This interaction doesn’t occur in a “normal sale.”

Look a “normal sale” first.

In a “normal sale,” the Realtor usually follows the following steps.

The Realtor signs a listing agreement with a seller and lists the seller’s property on the Multiple Listing Service (MLS). The Realtor also uses various means to market the property.

- Buyers make offers (usually through other Realtors) to buy the property.

- The listing Realtor presents all offers to the seller who selects the most appealing offer.

- The process then moves through escrow to closing.

These are not complicated steps.

Now with the short sale, things are different. The value of the property is less than the amount the owner (seller) owes on the loan. This creates some selling problems.

Buyers will not buy the property for an amount that will help the owner cover the existing liens and closing costs.

There is no way the Realtor ( a business person) can make a commission (business income).

What now?

The Realtor finds out about short sales and how the “short-sale lender” may take less than what the owner owes on the property. But there is a procedure.

This procedure involves those two steps I mentioned earlier: Acquisition and Negotiation.

Acquisition: So the Realtor stops doing what he or she normally does (finding properties to list and/or buyers of properties) and enters the acquisition phase of the short-sale process. Acquisition means Buyer

The owner fills out lots of documents to convince the “short-sale lender” that the owner’s hardship prevents the owner from paying his or her loan. This is the short-sale package.

But one thing is missing! An offer to buy the property.

You see, the complete package must contain an offer from a buyer to buy the “distressed” property. And the listing Realtor does not have any offers yet.

Of course, the Realtor can put a price in the listing without having an offer. But that price has nothing to do with reality. And the listing will no doubt include the words, “lender approval necessary” or some words like those.

But suppose that price attracts some interest from buyers whose Realtors send offers to the listing Realtor.

Now the Listing Realtor can send a complete short-sale package to the short-sale lender.

This takes us to the next step and MORE UNPRODUCTIVE TIME, Negotiation.

Negotiation: Lenders usually have a department called Loss Mitigation. A loss mitigator is assigned to the short-sale package and this person’s job is to “mitigate” (lessen) the lender’s loss.

The Loss Mitigation departments of lenders vary in their procedures, but one thing is for certain. They consume irreplaceable Time.

But stop here for a moment. This is not really about the Loss Mitigation departments of the lenders. It is about Realtors.

How much time has the Realtor spent attempting to assist this owner in default?

Some Realtors spend 20 hours or more on a short sale. And the outcome very often is not successful and the property goes to foreclosure.

In the end, lots of time (which is money) is wasted, especially because the Realtor was not pursuing tried-and-true money-making activities.

Thankfully, all is not doom and gloom, for there are companies that will help the Realtor and take away the pain. The Realtor still controls his or her listing through closing and gets the commission.

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